TWN Info Service on Biodiversity and Traditional Knowledge (Feb25/02)
26 February 2025
Third World Network

CBD: Cali Fund operationalized, “Not a Charity” says COP President

26 February, Rome (TWN) – The Secretariats of the Convention on Biological Diversity (CBD), UNDP and UNEP have come together to launch the “Cali Fund for the Fair and Equitable Sharing of Benefits from the Use of Digital Sequence Information on Genetic Resources”.

This took place during the resumed session of the 16th Meeting of the Conference of Parties (COP16) that is ongoing at the FAO Headquarters in Rome, from 25 to 27 February.

A memorandum of understanding was signed between UNEP, UNDP, and the United Nations Multi-Partner Trust Fund Office (MPTFO) during a Press Conference on 25 February regarding the management of the funds.

A separate document on “Terms of reference” will be drawn up, based on COP16 Decision 16/2 to operationalize fund contributions and utilization. The Fund will report to the Conference of Parties (COP) and function under the authority of the COP.

COP President H.E. Susana Muhamad, UNEP Deputy Executive Director Elizabeth Mrema, Executive Secretary to CBD Astrid Schomaker, UNDP Head of Nature Finance Onno van den Heuvel, Executive Coordinator of the UN MPTFO Alain Noudehou, Head of ABS Unit at CBD Secretariat Taukondjo Sem Shikongo spoke at the press conference.

H.E. Susana Muhamad while highlighting the fact the Cali Fund is a global response to a global challenge posed by digital technologies, stated that “This [Cali Fund] is not a charity from the companies. The funding here is the fair payment for the use of the global biodiversity”.

“...The Cali Fund is ready to receive the funding from the business. I would like to remark that we have created a response from CBD to a challenge that technology brought to us. We have had the Nagoya Protocol for a long time where actually companies that use biodiversity have to pay to the countries, but as the digital age and technology came, these global databases started putting DNA and digital genetic resources online that are used by the business to develop products and then they didn't need to go anymore to the countries to the governments… they could go to the databases and use digital sequences and so they were not paying back to the governments that were safeguarding that biodiversity…”

The funds will be distributed to governments directly through the application of a formula. A groundbreaking decision was taken that this formula will be decided by COP17, according to Susana Muhamad. “If we get that decision in COP17, we will skip a lot of the bureaucracy that we have now to access funding, which includes formulating projects, being revised; governments sometimes don't even access directly funds… they have to go through implementing agencies… so that could be another groundbreaking process of this fund,” she said.

Marcos Neto, Director of UNDP’s Sustainable Finance Hub gave his quote in the press release: “Success of the Cali Fund will be critical for providing finance to people on the ground who are custodians for species and genetic diversity. We are proud to be a founding partner for this groundbreaking Fund.”

“Parties can place regulations” says Executive Secretary

A journalist asked the panel whether businesses are obliged to contribute to the Fund, and how the contribution will be calculated.

CBD Executive Secretary Astrid Schomaker said the COP Decisions are not legally binding decisions, but Parties are now being asked to incentivize companies to live up to this expectation. This could take many forms, so they could put in place financial incentives, fiscal incentives, but also regulations. So, it can become legally binding at the country level, if the Parties so desire. But at the level of COP Decision - it is a strong political commitment.

Previously Susana Muhamad had concluded her speech by saying “Now the ball of this game is in the hands of the companies. Are they going to come forward to contribute? Are they going to enhance their brands? Are they going to show up and say, ‘yes I do use digital sequences of genetic resources and I am going to contribute fairly which is the other word that this fund has - fairness, justice.’”

In her opening remark, Schomaker also said that the Cali Fund is ready “to receive the funds from the private sector in the form of levies from the business income generated thanks to the use of digital sequence information”.

Elizabeth Mrema stated “As we all know more than half of the global GDP is dependent on Nature, and therefore genetic data provides that increasing proportion in sectors like energy, food, livelihood, security, medicine and all of these use artificial intelligence in live sciences. But the rush to access the gold mine of genetic data must not leave behind the communities that protect these precious natural resources, that's where the Cali Fund becomes a real game changer… it will also support those biodiversity rich countries and indigenous communities whose genetic resources and traditional knowledge contribute to scientific advancement”.

MoU a formal arrangement; Terms of Reference document forms the basis

To the question asked to the Panel on whether the Memorandum of Understanding (MoU) can be changed in the future and can Parties weigh in on it, the MPTFO representative Alain Noudehou responded by saying that the MoU is just an instrument signed by the UN entities and MPTFO, indicating there will not be any need to change the MoU.

He then pointed to another document called “terms of reference” which forms the basis of the functioning of the Cali Fund, and upon which the MoU is drawn. According to the representative, the terms of reference can be revised as the Cali Fund progresses.

The terms of reference document basically capture all the points that came from the COP Decision 16/2. Since governance body was constituted by Parties according to CBD Decision 16/2, Parties can at any time decide to change the terms of reference to the Cali fund to allow for any kind of new element.

Previously in her opening remark the Executive Secretary to the CBD had stated that “For the first time since the inception of the Convention on Biological Diversity, we now have a global fund under the COP, reporting to the COP therefore.”

Alain Noudehou had also stated in his speech that “The MPTFO, as the UN center of expertise on pooled funds, is proud to serve as the Administrative Agent for the Cali Fund and we look forward to supporting the efficient realization of its objectives.”